NOTE

- PENSION AND OTHER POSTRETIREMENT BENEFITS

The Company sponsors a defined benefit pension plan (the “Plan”) covering certain domestic employees. Benefits are based on each covered employee’s years of service and compensation. The Plan is funded in conformity with the funding requirements of applicable U.S. regulations. The Plan was closed to new participants effective

January

2008.

Employees hired after this date, in eligible locations, participate in an enhanced

401

(k) plan instead of the Plan. Employees hired prior to this date continue to accrue benefits under the Plan. The Company has contributed

$4.0

million to the Plan in the

first

nine

months of

2018

and does

not

expect to make any further contributions during the remainder of the year.

Additionally, the Company sponsors defined contribution pension plans made available to all domestic and Canadian employees. The Company funds the cost of these benefits as incurred.

The Company also sponsors a non-contributory defined benefit postretirement health care plan that provides health benefits to certain domestic and Canadian retirees and their spouses. The Company funds the cost of these benefits as incurred.

The following tables present the components of net periodic benefit costs:

	Pension Benefits						Postretirement Benefits
	Three Months Ended September 30,						Three Months Ended September 30,
	2018			2017			2018			2017
Service cost	$	562		$	655		$	194		$	312
Interest cost		644			599			141			203
Expected return on plan assets		(1,073	)		(1,138	)		-			-
Amortization of prior service cost		-			-			(283	)		-
Recognized actuarial loss (gain)		388			436			(103	)		(168	)
Settlement loss		120			448			-			-
Net periodic benefit cost	$	641		$	1,000		$	(51	)	$	347

	Pension Benefits						Postretirement Benefits
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Service cost	$	1,857		$	2,078		$	582		$	937
Interest cost		1,882			1,918			422			610
Expected return on plan assets		(3,380	)		(3,525	)		-			-
Amortization of prior service cost		-			-			(847	)		-
Recognized actuarial loss (gain)		1,206			1,384			(310	)		(505	)
Settlement loss		2,736			3,841			-			-
Net periodic benefit cost	$	4,301		$	5,696		$	(153	)	$	1,042

During the

three

and

nine

months ended

September 30, 2018,

the Company recorded settlement losses relating to retirees that received lump-sum distributions from the Company’s defined benefit pension plan totaling

$0.1

million and

$2.7

million, respectively. These charges were the result of lump-sum payments to retirees which exceeded the Plan’s actuarial service and interest cost thresholds.

The Company adopted ASU

2017

January 1, 2018

on a retrospective basis as discussed in Note

Pursuant to the amendments in this ASU, the service cost component is now included in cost of products sold and selling, general and administrative expenses. The non-service cost components of net periodic benefit costs are now included in other income (expense), net in the consolidated statements of income. The Company utilized the practical expedient approach, based on amounts previously disclosed, to reclassify non-service components of net periodic benefit cost from cost of products sold and selling, general and administrative expenses, into other income (expense), net on the consolidated statements of income.

The following table summarizes the amounts reclassified into other income (expense), net for the

three

and

nine

months ended

September 30, 2017:

	Three			Nine
	Months ended September 30,
	2017			2017
Cost of products sold	$	(259	)	$	(2,416	)
Selling, general and administrative expenses		(120	)		(1,307	)
Total amount reclassified	$	(379	)	$	(3,723	)